RBI May Increase Interest Rate Today, Know What Will Be The Effect Of This Decision On You?

An important meeting of the Monetary Policy Committee of the Reserve Bank of India is to be held on Friday. RBI can take some important decisions in this meeting to rein in inflation and prevent the falling value of the rupee against the US dollar. It is expected that a six-member committee headed by RBI Governor Shaktikanta Das may hike interest rates for the fourth time in a row. With this, the repo rate can be 0.35 to 0.50 percent.

RBI reduced the repo rate in March 2020 with the aim of reducing the impact of the lockdown caused by the Corona epidemic. after the situation became normal, the repo rate was kept stable till May 4, 2022. The three-day meeting of the Monetary Policy Committee began on Wednesday. The decision of the committee will be announced today 30 September.

The government has given the RBI a target of keeping the inflation rate at 4 percent with a variation of 2 percent. However, retail inflation has remained above the RBI's satisfactory level since January. The domestic currency has been depreciating sharply, amid high levels of inflation. The rupee is currently trading near 82 against the US currency. After the sharp increase in interest rates by the US central bank Federal Reserve, the fall in the exchange rate has intensified.

According to experts, the central bank may once again raise the key policy repo rate by 0.50 percent to take it to a three-year high of 5.9 percent. It is currently 5.4 percent. RBI has increased the repo rate by 1.40 percent since May. Industry body ASSOCHAM said that the RBI may increase the policy interest rates by at least 0.35 to 0.50 percent amidst rapid increases in interest rates of many other central banks including the US.